Capital Cost Allowance on Your T2125
How CCA classes, first-year rules, business-use percentages and a sale actually play out on Line 9936 — with a worked three-year example for a laptop and a car.
Capital cost allowance (CCA) is how the CRA lets you deduct the cost of depreciable property — a laptop, a camera, a work truck — over several years instead of all at once. You claim it on Line 9936 of your T2125. Small items used up within the year stay current expenses, such as office supplies or repairs.
Each asset goes into a class with its own rate — computers in Class 50 at 55%, furniture and most equipment in Class 8 at 20%, cars and trucks in Class 10 or 10.1 at 30%. Each year you apply the rate to the class's undepreciated capital cost (UCC), the part of the cost you have not yet deducted. Claiming is optional: you can claim anything from zero to the maximum and leave the rest of the UCC for later years.
The first-year rules depend on when you bought the asset and when it became available for use. The default is the half-year rule: only half of a year's net additions count in that first year. For property acquired after 2024, the reaccelerated investment incentive (enacted by Bill C-15, Royal Assent March 26, 2026) replaces it. For most classes, property available for use before 2030 gets 1.5 times the normal rate in year one. Bill C-15 also enacted a 100% first-year deduction for Class 50 computers acquired after April 15, 2024 and available for use before 2027. Property acquired before 2025 stays under the original incentive, which gave the full rate (no half-year cut) for property available for use in 2024–2027.
If you use an asset partly for personal purposes, such as a car, you claim only the business-use share of the CCA. When you sell, compare the proceeds (capped at original cost) with the class's UCC. If the proceeds are higher, the excess is recapture, which you add to income on line 8230. If no property is left in the class and UCC remains, you can deduct the remainder as a terminal loss on line 9270. Neither applies to a Class 10.1 vehicle. The worked example below runs through all of this with real numbers. Before you claim CCA on your own home, read the principal-residence warning in our business-use-of-home guide.
What You Can (and Can't) Deduct
Know exactly what belongs on Line 9936 — and what the CRA says doesn't qualify.
What Qualifies
- Computers, laptops and systems software (Class 50, 55%)
- Application software that is not systems software (Class 12, 100%)
- Office furniture, appliances and most general equipment, including cameras and lighting (Class 8, 20%)
- Photocopiers and electronic telephone equipment (Class 8, 20%)
- Tools, medical or dental instruments and kitchen utensils costing less than $500 each (Class 12, 100%)
- Tools costing $500 or more each (Class 8, 20%)
- Motor vehicles (such as a pick-up used more than 50% to haul goods) and passenger vehicles costing $39,000 or less before tax if bought in 2026 ($38,000 in 2025) — Class 10, 30%
- Passenger vehicles costing more than that limit — Class 10.1, 30%, with the capital cost capped at the limit plus GST/HST and PST
- Zero-emission vehicles (Class 54, 30%; up to $61,000 plus tax for a zero-emission passenger vehicle)
- Leasehold improvements to rented business premises (Class 13 — a special straight-line method; see Interpretation Bulletin IT-464R)
Does NOT Qualify
- Land — it is not depreciable, so split it out from the building cost
- Inventory you buy to resell
- Supplies and repairs that are current expenses
- The personal-use share of a mixed-use asset
- The GST/HST you recover as an input tax credit — subtract it from the capital cost
- Living things such as trees, shrubs or animals
Rules & Limits
Special CRA rules and percentage limits that apply to capital cost allowance (cca).
Special Rules
Half-Year Rule (the default)
Heads upIn the year you add property to a class, you normally calculate CCA on only half of the net additions. A $10,000 Class 8 purchase under this rule gives $10,000 × 50% × 20% = $1,000 in year one. Most small tools in Class 12 are exempt from the half-year rule, and so is property that qualifies for the incentives below.
Guide T4002, Chapter 4, Column 18Reaccelerated Investment Incentive (acquired after 2024)
AdvantageEnacted by Bill C-15 (Royal Assent March 26, 2026). For property acquired after 2024 and available for use before 2030, the half-year rule is suspended and half of the addition is added on top, so year one is 1.5× the normal rate: 30% → 45% for Class 10, 20% → 30% for Class 8. The enhancement phases out for property available for use from 2030 to 2033. For Class 12 it only removes the half-year rule (software is then fully deductible in year one).
Guide T4002, Chapter 4, Column 17Class 50 Computers: 100% in Year One (to the end of 2026)
AdvantageClass 50 property acquired after April 15, 2024 and available for use before 2027 can be written off in full in the first year — the "immediate expensing for productivity-enhancing assets" in Bill C-15. A computer that first becomes available for use in 2027 falls back to the 1.5× incentive: 55% × 1.5 = 82.5% in year one.
Guide T4002, Chapter 4, Class 50Class 10.1 Passenger Vehicles
Heads upA passenger vehicle that costs more than the limit before tax ($38,000 if bought in 2025, $39,000 if bought in 2026) goes in its own Class 10.1. Its capital cost is capped at the limit plus GST/HST and PST on the limit. There is no recapture and no terminal loss when you sell it. Instead, in the year of sale you can claim half a year of CCA if you owned the vehicle at the end of the previous year.
Guide T4002, Chapter 4, Class 10.1; Finance Canada, January 14, 2026Motor Vehicle or Passenger Vehicle?
Heads upThe class depends on the CRA definition, not the badge on the tailgate. A pick-up or van seating 1–3 used more than 50% to carry goods or equipment is a motor vehicle and is not capped. A pick-up, SUV or van seating 4–9 is a motor vehicle only if it is used 90% or more to carry goods, equipment or passengers. A sedan or coupe is always a passenger vehicle.
Guide T4002, Chapter 3, Vehicle definitions chartShort First Fiscal Period
Heads upIf your business started part-way through the year, prorate the CCA by days. For example, a business that began on June 1, 2025 has a 214-day first year, so a $3,500 calculated CCA becomes $3,500 × 214 ÷ 365 = $2,052.
Guide T4002, Chapter 4CCA on Your Home Can Cost You Later
Heads upYou can claim CCA on the business part of your home, but the CRA warns that doing so can have a negative effect on the principal residence exemption when you sell. Ask your accountant before claiming it.
Income Tax Folio S1-F3-C2, Principal ResidencePercentage Limits
| Rule | Limit |
|---|---|
| Class 50 — laptops, desktops, monitors, systems software | 55% |
| Class 12 — application software; tools, instruments and utensils under $500 | 100% |
| Class 8 — furniture, cameras, equipment, tools $500+ | 20% |
| Class 10 — motor vehicles; passenger vehicles at or under the limit | 30% |
| Class 10.1 — passenger vehicles over the limit | 30% |
| Class 54 — zero-emission vehicles | 30% |
| Vehicle used partly for personal driving | Business km ÷ total km |
Real-World Examples
See how different professionals use Line 9936 deductions in practice.
Worked example, 2026: laptop in Class 50
Bought a laptop in February 2026 for $2,400 + $312 HST, used 100% for business. Because she is not registered, the HST is part of the cost. Class 50, acquired after April 15, 2024 and available for use before 2027, so the 100% first-year deduction applies. UCC at the end of 2026: $0.
$2,712 capital cost
$2,712 CCA in 2026
Worked example, 2026: car in Class 10
Bought a sedan in June 2026 for $30,000 + $3,900 HST = $33,900. That is under $39,000 before tax, so Class 10. Logbook: 70% business use. The 1.5× incentive applies: $33,900 × 1.5 × 30% = $15,255 of CCA for the class. She claims 70% of it. UCC at the end of 2026: $33,900 − $15,255 = $18,645. Under the plain half-year rule, year one would have been only $5,085 before the business-use split.
$15,255 CCA calculated
$10,678.50 on Line 9936 (70%)
Worked example, 2027–2028: UCC carries forward
2027: $18,645 × 30% = $5,593.50 CCA, of which 70% is $3,915.45. UCC falls to $13,051.50. 2028: $13,051.50 × 30% = $3,915.45 CCA, of which 70% is $2,740.82. UCC falls to $9,136.05. The laptop class has $0 UCC, so there is no further Class 50 CCA.
$9,508.95 CCA over two years
$6,656.27 on Line 9936 (70%)
Worked example, 2029: selling both assets
Early 2029 she sells the car for $14,000 and the laptop for $400, leaving both classes empty. Car: $9,136.05 − $14,000 = −$4,863.95, so that amount is recaptured, and she reports the 70% business share of it. Laptop: $0 − $400 = −$400, all recaptured. Had the car sold for $8,000 instead, the $1,136.05 left in the class would be a terminal loss on line 9270 (70% = $795.24).
$14,400 total proceeds
Recapture on line 8230: $3,404.77 (car) + $400 (laptop)
Contrast: same buyer, $45,000 car (Class 10.1)
A $45,000 sedan bought in 2026 is over the $39,000 limit, so the capital cost is capped at $39,000 + 13% HST = $44,070, in its own Class 10.1. Year one: $44,070 × 1.5 × 30% = $19,831.50, of which 70% is claimed. When she sells it there is no recapture and no terminal loss, whatever the price.
$50,850 paid; $44,070 capital cost
$13,882.05 on Line 9936 in 2026 (70%)
Camera body and lenses
Bought a camera body and lenses for $5,400 before tax in 2026 and recovered the HST as an input tax credit. Class 8 at 20%, with the 1.5× incentive in year one.
$5,400
$1,620 first-year CCA (20% × 1.5)
Regular-cab work pick-up
Bought a regular-cab pick-up (seats 3) for $45,000 before tax in 2026, used more than 50% to haul tools and materials. It is a motor vehicle, so it goes in Class 10 with no $39,000 cap. A crew-cab used less than 90% for hauling would be a passenger vehicle in Class 10.1.
$45,000 (no cap)
$20,250 first-year CCA (30% × 1.5), times business-use %
Common Mistakes to Avoid
These errors on Line 9936 can trigger a CRA review — here's how to get it right.
Expensing a laptop or camera on an office or supplies line
Depreciable property goes through CCA on Line 9936, not Line 8810 or 8811. For a computer bought in 2025 or 2026 the result can still be a 100% deduction in year one — but it has to be claimed as Class 50 CCA, and a later sale can trigger recapture.
Putting a tool of $500 or more in Class 12
The under-$500 test is per tool. A $480 drill is Class 12 (100%); a $650 mitre saw is Class 8 (20%). The $500 test applies to tools, medical or dental instruments and kitchen utensils — not to furniture or computers, which have their own classes at any price.
Claiming 100% of the CCA on a car you also drive personally
Work out the full CCA for the class, then claim only the business-use share: business km ÷ total km from your logbook. If you drove 14,000 of 20,000 km for business, claim 70%.
Including recovered GST/HST in the capital cost
If you are a GST/HST registrant and claim an input tax credit for the tax on an asset, subtract it from the capital cost. Passenger vehicles used less than 90% for business are an exception: the credit comes off the UCC at the start of the next year instead.
Using the 2025 vehicle limit for a 2026 purchase
The Class 10.1 limit is set by the year you acquire the car: $37,000 (2024), $38,000 (2025), $39,000 (2026), all before tax. A $38,500 car bought in 2026 is Class 10, not 10.1.
Forgetting recapture when you sell
If you sell an asset for more than the UCC left in its class, the excess comes back into income on line 8230. This is common with computers and cars written off quickly under the first-year incentives.
Commonly Confused Categories
These categories are often mixed up with Capital Cost Allowance (CCA). Here's the difference.
Office Expenses
Toner, paper and other consumables are current expenses on Line 8810. A printer, desk or computer lasts for years and is depreciable property claimed through CCA on Line 9936.
Repairs & Maintenance
A repair that restores an asset to how it was is a current expense on Line 8960. An improvement that makes it better than it was originally is added to the asset's class and depreciated.
Motor Vehicle Expenses
Fuel, insurance, repairs, licence fees and loan interest for your vehicle go on Line 9281. The vehicle's CCA is calculated separately and goes on Line 9936. Both use the same business-use percentage from your logbook.
Sample Receipt Walkthrough
See how ScanForTax processes a typical cca expense.
Apple Store
2026-06-20
Ontario
How ScanForTax categorizes this
ScanForTax reads this receipt, extracts the $415.74 HST as its own amount, and files the purchase under Line 9936 as a capital purchase, so it reaches your accountant as a capital item rather than as an office expense. ScanForTax does not assign the CCA class or calculate the CCA. You (or your accountant) put the laptop in Class 50 and work out the claim. AppleCare+ is a three-year service contract, not part of the laptop's capital cost. It is a prepaid expense deducted over the years it covers.
Tax Calculation Breakdown
See the exact tax math for a typical cca purchase.
$3,000 laptop bought in 2026 (Class 50)
Ontario
If you are GST/HST-registered, you recover the $390 HST as an input tax credit, and the capital cost is $3,000. If you are not registered, the capital cost is $3,390. A laptop acquired after April 15, 2024 and available for use before 2027 qualifies for the 100% first-year deduction in Class 50, so the full capital cost can be claimed as CCA in 2026. The same laptop first used in 2027 would get 55% × 1.5 = 82.5% in year one: $2,475 on a $3,000 cost.
Frequently Asked Questions
What is the half-year rule, and does it still apply?
Can I write off a computer in full in the year I buy it?
Which class does a car go in, and what is the 2026 limit?
How does business-use percentage work for CCA on a vehicle?
Do I have to claim the maximum CCA every year?
What happens when I sell an asset I claimed CCA on?
Does ScanForTax calculate my CCA?
Where Line 9936 sits on the full form: T2125 line by line →
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Tax Guides by Province
See how tax recovery works for cca expenses in each province.
Related Expense Categories
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